Shutdown Crypto Crash!!🚨Over This Week?🔥

Episode Transcript
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Speaker 1 (00:00):
On a record day of government shutdown. The market is
getting annihilated. Only one thing is going to say, but
we'll break it down for you today. It's going to
be a good one. Don't miss it. Let's just jump
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(00:41):
time to switch your exchange jump over to BTCC and
use our link. Okay, couple of things going on right now.
Crypto is getting hammered. Three hundred million worth of lungs
now liquidated just in the past sixty minutes. Bitcoin as
I am recording is under one hundred k. Looks like
it's going to bust one hundred k. As we record

(01:01):
right now, I want to open up real quick to
a clip because this clip we'll get into what is
the catalyst that could recorrect the market almost immediately.

Speaker 2 (01:12):
Let's watch this, tying for the longest shutdown in American history.
Joining us right now is Oklahoma Republican Senator Mark Wayne Mullen.

Speaker 3 (01:20):
And so they wanted to wait until after today because
they were afraid that they opened the government up before today,
that their base wouldn't show up and vote in Virginia
and New Jersey, where we have tied elections. After today
the negotiations to keep Dick Durbin, he will release everybody
and allow them to vote the way they want to.
So that's why I have said it very bullishly last

(01:43):
week and all weekend, is that Becky, we're going to
probably start negotiations tomorrow with the Democrats claiming victory will
probably had the vote in either tomorrow night or Thursday.
Then the House has got to come back because we're
going to have to make some changes to it to
change the date, and there's discussions about maybe putting three
appropriation bills on the CR two.

Speaker 2 (02:05):
You think it's possible we could reopen the government this week, then.

Speaker 3 (02:08):
Yes, I think we'll be open by Sunday. It depends
on that. Remember, it wants to happen.

Speaker 1 (02:13):
The amount of market pressure that we're getting right now,
especially around government shutdown, along with a couple other things
that I think we're seeing in the market itself, I
think is being to a certain extent manipulated. Now, how
is bitcoin going to if it does go down to
the ninety eight which is something we've been talking about
with some of our analysts for a couple of weeks.
If you look at the polymarket right now, big change

(02:36):
just in the last couple of days. So what do
a few people know if we start seeing this adjustment
between November eighth and eleventh, which is now up to
twenty eight percent today being November fourth, so that would
be in the window of this week as a reopening.
If we continue to see the fall off dramatically from
the November sixteenth and beyond, so it does clearly point

(02:58):
to a very significant issue that is being addressed in DC.
I want to go further into this this of course,
with Trump and Trump saying doesn't matter snap benefits will
only be given when the US government has reopened. This
I think will continue to put more pressure on the Democrats.
Over forty million Americans rely on snaps, so this is
a big deal if Trump can continue to defy courts

(03:20):
on this, and it will push the Democrats into a
position that maybe could get us back open. Now. Scott
Bessen came on CNBC and he was talking about healthcare,
because this is another major factor, and the Republicans claim
that they have something already waiting in the wings. Listen
to what I had to say.

Speaker 3 (03:38):
The premiums are going up because the cost is going up,
and there's no way to provide Affordable Care Act services.

Speaker 1 (03:45):
How do you Is there a plan?

Speaker 3 (03:47):
Because the President has talked about a plan for a
long time and here we are.

Speaker 4 (03:51):
You know, I'm not going to preview it. That reopened
the government and then the talks can start. And we're
starting to see this effect the economy. The busiest travel
day of the year, the day after Thanksgimming is a disaster.
People aren't able to be with their families.

Speaker 1 (04:07):
Bessen is right, it is affecting the economy. And I
think one of the things that is becoming more evident
is the amount of data loss that we have had.
If you look at this tweet by cobees sixty plus
day blackout is what we're up against right now. This
includes jobs reports, the unemployment rate, we get CPI inflation data,
PPI data, the monthly retail sales data. All of this

(04:29):
has been redacted right now based on a government shutdown.
The real question is what is the Fed going to do?
How is the market going to respond when we actually
see this carryover of data accumulation dropped into the market
at one time, as well as a government reopening, and

(04:50):
as well as possibly the Clarity Act and many other
things that could start to play into this. But there
are other things that have to play out for all
of this to be least on the way up, and
one of them, of course, you have to watch for
is the Supreme Court around tariffs. This would be the
last major catalysts that would be significant. If the Supreme

(05:11):
Court does rule that President Trump does not have the
executive powers to use tariffs like he has been using them,
this could change things dramatically. Market could roar out of this.
I think the key here is how this will get
resolved through the Supreme Court, and that's going to happen
this week. So be on the lookout for that. Also,

(05:32):
the New York City mayoral election is in. It looks
like Zoron Mondami is going to be the new mayor
of New York and that, of course is another critical
thing that needed to occur obviously for the Democrats as
we start to see a lot of this out of
the way and now that they can go back, hopefully
and get into a position of reopening the government. I

(05:53):
want to go to another clip because this gets into
how some of the states were responding to what was
happening in New York. Take a look well. Earlier today,
Kevin A. Rabbit tweeted about the New York City mayoral racing.

Speaker 5 (06:05):
Quote, after the polls closed tomorrow night, I will impose
a one hundred percent tariff on anyone moving to Texas
from NYC.

Speaker 1 (06:12):
That post is getting a lot of responses online.

Speaker 6 (06:14):
As you can imagine, it will violate Article one, Section
ten of the United States Constitution, and it is discriminatory.

Speaker 1 (06:19):
Blue states like New York literally fund red states and
keep them afloat. Then stop funding your tax cuts with
New York's money.

Speaker 6 (06:26):
Isn't living in the same state as Greg Abbott?

Speaker 1 (06:28):
Punishment enough, We call the Governor's office, which said he
was just joking. All right, I don't understand this was
I thought it was a great troll. I mean, what
a great troll on the time that you would troll
fifteen point four million views. He is definitely going for
elon trollability. So of course, obviously that is ridiculous. In

(06:52):
the great state of Texas. You would be tariffed if
you move in there. Other things that are happening. Of course,
all this going on during Ripple Swell, Robinhood confirmed that
the industry is being blocked by a lack of law.
And this of course is all referring to the Clarity Act,
which means we've got to get this underway.

Speaker 6 (07:09):
Now.

Speaker 1 (07:09):
Remember we think the Clarity Act is going to go
through with flying colors, We're going to get clarity. And
it's possible that we could see this even before Thanksgiving.
That's two weeks away, guys, two weeks away. That would
be an absolute move in the industry. And of course,
if you think about what we have seen around people
saying that we are going under one hundred k and

(07:30):
never coming back. This is reference to bitcoin. Then you
listen to Tom Lee saying we're at one fifty to two
hundred and a seven thousand s and P five hundred.
That's the kind of polar opposites that we're dealing with
right now. Further into what was happening, this is of course,
the Bank Policy Institute going in and says if stable
coins become more integrated into traditional financial system without full

(07:53):
safeguards keywords here, crypto market shocks could infect a broader
economy for the first time. From the BPI, I just
call bs on this one. This, of course, is the
bank industry trying to hold on for the last moments
of freedom that they have been holding on. In terms
of the American public, this does not really apply. This,

(08:14):
of course, was a response to this, and the statement
is more interested in reinforcing their BSA and the AML
motes than constructively suggesting improvements to the BSA, which is
really the way that they need to do it is
get with the times they've done it before. The bank
industry has modernized. I think this is just another one
that will push them into modernization around digital assets. We

(08:35):
will all have stable coins in our banks this time
next year, possibly as early as January or February, So
just be on the lookout. It's going to happen, guys,
and they'll come kicking and scream, screaming all the way.
Here's aDNA Freeman. She was, of course the CEO and
president of Nasdaq, and she says, we're waiting on the
Clarity Act.

Speaker 5 (08:53):
Take a look can give us a temperature check of
the rest of the world of banking and other kind
of major legas the institutions who would also need to
be a part of the picture. But I think to
get them really engaged in the markets, there has to
be regulatory clarity, and I think that will make it
so that it accelerates the institucial adoption of digitalized system
in general.

Speaker 1 (09:12):
Okay, so Adina, they're kind of talking to the point
that clarity is needed, and they know it's coming. This
is just a afterthought. I think we understand that Congress
is going to get this through. It's going to happen, guys.
This is just a matter of time before it does.
And I realized the government shutdown is really the nemesis here.

(09:33):
It is the reason we're in this position right now.
Otherwise the market would I think the market would be
absolutely soaring. And if you can continue to see where
gold is holding very solidly around four k the s
and P well into this deep sixty nine hundred range,
does it hold in continued to fly because only risk
assets are the ones that have really kind of had

(09:53):
the most hit. Now Citybank says we don't necessarily want
to go this direction, and they're going into how they
want to do it, which is public access. Let's know
what they had to say.

Speaker 7 (10:04):
Clients don't want just a city token right like that,
and nor do we need a blockchain for a purely
city token. But from day one, our strategy has always
been like network driven, and you know, we've been in
the private permission world because that's the only place we
could operate right And now with this new administration and
genius and the clarity coming hopefully no pun intended, it
gives us that clarity about what does it mean for

(10:27):
highly regulated institutions like us to be able to you know,
engage with public chains. So unless it's clearly like permissionble
what we can and cannot do, we're not going to
engage in that space.

Speaker 8 (10:37):
I having worked at banks many years, banks are proud
and what was it like to try to, you know,
convince City that city token wasn't maybe going to be
the way through. So pitting you on the spot a
little bit, but.

Speaker 1 (10:52):
Well, I just should say, you know, what was it
like to ben the knee. That's the issue that I
think a lot of these banks will face over time. Now,
the real I think question out there in the market
is going to be how will consumers react to a
much more open banking system to where you could move
your assets around pretty freely, because right now there's still

(11:13):
quite a bit of lock up even on cash of
being able to do withdraws, a lot of limitations around ACCH,
a lot of limitations on wires, you know, the process
that you have to jump through to get that done.
This really does change things a lot further into this,
of course, senators aim to pass the Bitcoin and Crypto
Market Law before thanks Gimming, and of course this is
the point I'm getting at. It's going to happen. I

(11:34):
think Thanksgiving will be a absolute barn burner around the
market because I think we're going to see clarity. If
it doesn't get the final at least we'll have the
definition that is going to happen very very closely to
that time frame. Now, other things that were happening at Swell.
We're pretty indicative of where the market is right now.

(11:55):
This is an announcement about Ripple unlocking what we'll We'll
see in potential institutional capital that we have never seen
before coming into the market. Take a look now.

Speaker 9 (12:06):
Last month, Ripple made a significant expansion into the multi
trillion dollar corporate treasury market through its one billion dollar
acquisition of G Treasury. Please welcome the CEO of G Treasury.
We're not very key to the desks.

Speaker 6 (12:18):
So think about us as being the control panel that
a CFO or treasurer uses to manage their treasury function
within large corporates. We serve clients like American Airlines, Subway,
Hartford Insurance, and we do that on a global basis.

Speaker 8 (12:33):
Balance sheet management, assets liabilities and duration management and things
like this, you know, short and long term financing. This
is what that dashboard has on it.

Speaker 6 (12:42):
Absolutely, they typically have a complex banking network. All of
that within one panel is what's happening. We manage two
hundred and fifty billion in the accounts that we monitor,
so we orchestrate thirteen trillion of payments. They can now
move money instantly and get yield on nights and weekends,
there's virtually no activity. So imagine a world now where

(13:04):
Ripple brings a product that can make that money work.
So this faster pace of money movement will allow for
use cases that they've never thought about before. It's an
explosion of excitement.

Speaker 8 (13:15):
I'm thinking also about hedging. American Airlines has to hedge
fuel prices and other prices. Hartford Insurance I think you mentioned,
I mean they have to hedge equity prices and rates.
Maybe not seven days a week. Are you going to
kill all your client's weekends?

Speaker 6 (13:29):
So I had not thought about that problem.

Speaker 8 (13:32):
Actually, your competitors must have lost some sleep after they
saw what happened, you know, to your firm.

Speaker 6 (13:38):
Yeah, it was a nice night.

Speaker 1 (13:42):
This is much bigger than I think a lot of
people are giving it credit for. This was I think
one of the final artistic moves by garling House and
his team to put Ripple in a very unique position,
more so than any other industry leader out there. If
you look at where Ripples has been in terms that
are almost two and a half billion dollars worth of acquisitions,

(14:03):
So big noise I think coming in from New York
right now? All right, So other things that were happening there.
At the event, a bit Wise referenced how successful there
Solana ETF was and where they think this is going
from here, because they're kind of giving a six month
window for some big things to happen.

Speaker 9 (14:20):
Take a look, did you predict that beesol would perform
so well? And dig a little bit deeper.

Speaker 10 (14:26):
It's incredible. Yesterday it took in about seventy million dollars
and it's gathered over four hundred million dollars in five
business days, and individuals who are using the benefit of
an ETF allowing them to access it in retirement accounts
and other types of accounts. So I think that there's
still a huge amount of capital that has not been
able to access many assets. We're fortunate to be able

(14:46):
to launch an XRPTF. I think it'll be a similar story.
Having said that, I don't think that investors are going
to have a portfolio of twenty three different digital assets.
So I think over maybe the six to twelve month timeframe,
more investors will turn tow you in next solutions.

Speaker 1 (15:02):
All Right, he might be right that was a hunter
coming in from Bigwise, and he may be right around
index solutions, But I think the big three or four
will most likely still win. In terms of the isolated ones.
That includes Bitcoin, ETFs obviously what we'll see within the
ethereum network, and then of course XRPN, Salona. Those would

(15:22):
be the big ones. I think that will lead out
the pack. I guess that's a good thing in one way,
but if you're an ETF investor, you might want to
look at the index side of things. Now. One other
catalysts that could play into this is going to be IPOs.
IPOs have been pretty much at bay since the government
shut down. According to Friedman, there is a huge pent

(15:42):
up demand and lineup of IPOs coming that are crypto oriented.

Speaker 5 (15:47):
Take a look, and then when we look at the pipeline,
the immediate pipeline of companies wanting to come out either
through IPOs or spac combinations that have already been announced,
about seventeen companies that are waiting to come out immediately.
Webviously are sitting on a government shutdown right now. It's
slowing things down of it. But of those seventeen, I
think either twelve or thirteen are coming to an assax,

(16:08):
so some to come out, hopefully in the last month
or so of year. But we are expecting actually a
pretty busy first quarter just because of the fact we've
had some delays in the fourth quarter.

Speaker 1 (16:18):
Okay, all right, so delays in the fourth quarter obviously
government shutdown. Coiling into that right there. Obviously we look
at the market right now on a massive red day
with bitcoing down almost five percent just as we're recording
right here. If this is the point of no return, guys,
I think we are in this range of possibly the

(16:39):
ninety eight to ninety seven range that is going to
be considerable. And it's possible even if you look at
ethereum holding it right around thirty two hundred and thirty
three hundred right now, if we clip down to what
we could see and that is under three k, because
there'll be a large wall of resistance there. This is
the line in the sand. If we don't get in

(17:01):
at least a government reopening. That's how much of this
is in affecting the crypto markets. This may be the
beginning of a bear market. Yep, you heard me say it.
Those are the kind of things that if and the
other question you have to ask is has it gone
along so long that this has started to cause permanent
damage to the market, especially on risk assets. All Right,

(17:22):
you guys, if you're not in our Diamond Circle, make
sure and do that. It's another place where you can
get additional content from us. And also, if you're not
following me out there on X, make sure and do that.
It's just at Paul Baron. We'll catch the next time
right here on The Paul Baron Show.

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